Powerco chairman Barry Upson yesterday described the $NZ38.1 million net profit, which was 4.9% up on that forecast last October, as a remarkable achievement that demonstrated Powerco's strength and ability in acquiring and managing large network operations.
Last October Powerco became New Zealand's biggest gas distributor and second largest electricity lines company after buying a significant chunk of United Networks Ltd's central and lower North Island power and gas reticulation network for $NZ810 million.
The successful integration of the UNL assets with those of Powerco had taken just three months and, by acquiring an urban gas network in greater Wellington and an electricity network in Tauranga, Powerco had "extended the synergies" between its urban and rural operations, said Upson.
The company's asset base has grown from $NZ800 million to $NZ1.7 billion as it acquired electricity network assets in the Tauranga, eastern and southern Waikato, Thames and Coromandel and gas assets including Wellington city, Horowhenua, Manawatu and Hawkes Bay.
Upson added that the Powerco board remained confident the 2004 forecast after-tax earnings of $NZ53.6 million should be achieved. Powerco listed on the New Zealand Stock Exchange in December 2000 and was included in the NZSE Top 40 index last December 2.
Meanwhile, the Takeovers Panel has restrained TrustPower for 21 days from April 17, from calling a shareholders' meeting to approve the buyback because it does not comply with the Takeovers Code's class exemption provisions.
The two-for-seven buyback at $3.70 a share was conditional on shareholders approving an exemption, though the panel had earlier said the exemption provisions should have been secured before any buyback offer was made. TrustPower announced the buyback on March 20.
Media reports have quoted J B Were analyst Peter Sigley saying small shareholders were unlikely to take part in the buyback because they could sell their shares for more on the sharemarket and that AGL's 20% stake was a big parcel and would be hard to sell.
However, the buyback offered AGL the opportunity to completely sell out if the three other big shareholders - Infratil with 27%, its ally Alliant International with 19% and the Tauranga Energy Consumers Trust with 24% - did not take part. It is considered unlikely that these three will participate.
AGL has not commented, but it gave up its TrustPower board seat a year ago and its key investment in New Zealand is its 66% in NGC Holdings.
TrustPower chief executive Keith Tempest has admitted not many shareholders had accepted the buyback, but said TrustPower was too lightly geared and the buyback would address that and repay capital to shareholders.
